WPI inflation dips to 3.39% in October as food prices soften

Wholesale Price Index (WPI) inflation in vegetables witnessed deflationary pressures and was recorded at (-)9.97 per cent in October.

Overall, the food inflation basket showed moderation with inflation at 4.34 per cent in October, as against 5.75 per cent in September. (Source: File)

In the second consecutive month of decline, wholesale inflation eased to 3.39 per cent in October as food articles, led by vegetables, witnessed softening of prices. The wholesale price-based inflation, reflecting the annual rate of price rise, in September stood at 3.57 per cent. In October 2015, WPI inflation was (-)3.70 per cent.

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Wholesale Price Index (WPI) inflation in vegetables witnessed deflationary pressures and was recorded at (-)9.97 per cent in October. Inflation in this category had scaled a high of 28.45 per cent in July. This was aided by inflation data for onion, which was at (-)65.97 per cent.

Pulses inflation continued to rule high at 21.80 per cent in October, according to the Commerce Ministry data. Potato, a daily consumable vegetable, witnessed maximum inflationary pressure at 60.58 per cent. Inflation in fruits rose 6.45 per cent during the month.

Overall, the food inflation basket showed moderation with inflation at 4.34 per cent in October, as against 5.75 per cent in September. The inflation print for manufactured articles read at 2.67 per cent in October compared to 2.48 per cent in the previous month.

The rate of inflation in sugar was at 29.63 per cent and that for petrol was 3.57 per cent. The WPI inflation for August has been revised upward at 3.85 per cent against provisional estimate of 3.74 per cent.

Data for October retail inflation is expected later in the day. The all-powerful Monetary Policy Committee headed by RBI Governor Urjit Patel last month cut benchmark interest rates by 0.25 per cent to 6.25 per cent.

While he had signalled more tolerance towards inflation, the easing in CPI data was in line with the RBI’s forecast for average 5 per cent inflation in fourth quarter of 2016. This, many expect, would create more room for interest rate cuts.